arizona beverage company: marketing strategy

7/23/2019 AriZona Beverage Company: Marketing Strategy

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OVERVIEW/HISTORY AriZona Beverage Companybegan in Long Island, New

York in 1992

John Ferolito and Don Vultaggio founded Ferolito,Vultaggio & Sons, originally a beer brewery

abandoned the beer business in favour of a venture into

the tea industry goal: create a high quality product in packaging that

stands out.

since become the #1 ready-to-drink tea in the UnitedStates

business philosophy centers on offering a gourmet,organic drink experience while keeping consumer costsat a minimum

AriZonasLemon Iced Tea, was invented through anemphasis on quality, all-natural ingredients, withoutnatural flavours, colours, or preservatives


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TOTALPRODUCT CONCEPT AriZona Lemon Tea is made from real black tea and

natural lemon flavor that help to create a slightly sweet,refreshing flavorof sun brewed tea style

provides a delicious, refreshing beverage

includes symbolic and experiential benefits association withAriZonas ties to the

underground/independent arts culture (music, design, etc.)

symbolic benefits are integral to the target market

all-natural benefits of tea: improve mental awareness

boost the immune system strengthen teeth

prevent aging issues

serve as an anti-allergic

lower blood sugar


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PRODUCT LIFE CYCLE

late-growth phase

costs reduced

sales volume increase profitability increase

competition increase

public awareness increase


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PRODUCT MIX

includes product width of 15 other product lines

besides iced tea

green tea

herbal tonic

energy drinks

juice blends

organic tea

tea water

bottled water

bagged tea

iced tea includes a depth of 10 different products


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ICED TEA PRODUCT LINE(EXAMPLES)

Peach Iced Tea

Raspberry Iced Tea

Half & Half: Mango

Half & Half: Lemonade Southern-Style Sweet


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PRODUCT & BRAND

cash cow forAriZona

significant share of market

no longer high-growth

convenience product

routinized-response purchase

increasingly valuable brand equity

brand preference


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BOSTON CONSULTING GROUP MATRIX

Star Question Mark

Arnold Palmer (iced tea +

lemonade)

Rx Energy Herbal Tonic

Bagged Tea

Tea Water

Juice Blends

Organic TeaHalf & Half

Cash Cow Dog

Iced Tea Powdered Mix

Market Share

Gro

wth

LowHigh

High

Low


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MARKET SHARE

32%

68%

Market Share: Iced Tea

AriZona

Competitors


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COMPETITOR ANALYSISStrengths Weaknesses

Lipton

- no preservatives, art if icial

colours or flavours- gluten-free

- can be used to make hot tea

- works with Pepsi

- diet versions

- currently trails behind

competitors in most developedmarkets

Nestea

- contains antioxidants

- works with Coca-Cola

- one of the worlds best-knownand best-selling brands of both

hot leaf and ready-to-drink tea

- represents around 10% of the

world market for tea

- rumoured to have watered

down taste

- synthetic tasting- expensive

- contains a lot of corn sugar and

fructose

Brisk

- marketed as the edgy tea by

Lipton

- focused on those that want

more of an extreme and

energizing/rejuvenating iced

tea- unique taste

- reviews suggest it lacks in

flavour

- mostly made-up of sugar

- not as available as other iced

teas in every market

Snapple

- very popular and readily

available almost everywhere

- Real Facts (interactive)

- diet and caffeine-free versions

- sold widely

- mostly available in glass bottles

- expensive

- competes with carbonated soft

drinks as well


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TARGET MARKETS

primary market: 18-24 year olds

secondary markets: 13-17 year olds

25-34 year olds segmentation variables:

demographic age segmentations

behaviouristic

product use geographic

primarily urban/commercial, not rural

psychographic personality, values, attitudes, interests, or lifestyles


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PRICING STRATEGY

low-cost pricing model

priced at 99

advertisement mechanism

competitive pricing

major bang-for-your-buck

pay just over 4 per fluid ounce

high-quality, low-cost


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DISTRIBUTION

intensive distribution

using all available outlets to distribute

dual distribution

independent wholesalers and directly to largechains

hybrid distribution approach

available in:

convenience stores supermarkets

superstores

warehouse clubs


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PACKAGING

functional purpose maintain freshness of the product

bright colours

attractive designs

unique product-by-product creations


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PROMOTION

focus on packaging

attractive packaging design

use TV ad money for packaging

word-of-mouth

independent arts culture

sponsorships

outreach

charity


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S.W.O.T. ANALYSISStrengths Weaknesses

- pre-existing unique can design- affordable cost

- recognition potential (through

packaging)

- marketing and sales flexibility

(independently owned)

- less than optimal awareness- lack of advertisement

- not top-of-mind

- not available everywhere

Opportunities Threats

- increasing awareness through

advertising- advertise to new target market

- creating new and different

flavours

- becoming top-of-mind

- competing iced tea brands that

have better recognition and alarger budget (due to being

owned by larger holding

companies)

- unique yet often inconvenient

packaging (large can)


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FUTURE OUTLOOK

company continues to grow

continue to expand iced tea flavours

mergers and partnerships diversify product mix

efficiently expand into new lines

seek to attain top-of-mind-awareness

maintain private, independent, grass-rootsapproach

enlarge customer base generate more word-of-mouth publicity

we make stuff wed like to drink ourselves


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THE END

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arizona beverage company: marketing strategy

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